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Familiarize yourself with real estate terminology

Here’s a brief glossary of the terms you’re likely to hear frequently in the search for your new home.

Are you ready to buy a house? That’s fine! But they will have to know some procedures that will probably confuse them at the beginning, especially if they are going to process a mortgage loan. Here’s a brief glossary of the terms you’re likely to hear frequently in the search for your new home.

Real Estate

Real estate or real estate are all those assets that, as opposed to movable property, have a fixed situation in space and are not susceptible to being taken or transferred, such as the soil, buildings, and constructions of all kinds attached to the land.

Mortgage

Transfer of rights to property (such as a home) generally, through a loan. A mortgage is canceled when the loan is paid in full. A mortgage is a loan that is granted to help in the purchase of a home. The lender gives you a certain sum of money that you have to repay in a specified term.

Capital

Capital is the amount of money borrowed according to the selling price of the house.

Interests

Interest represents the cost of borrowing money.

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Taxes

Taxes are paid to the local government and are usually a percentage of the value of the property. The amount of tax varies depending on where you live.

Insurance

Contract by which an insurance company is obligated to pay damages or to pay a sum of money, using the payment of a certain amount of money (premium), in the event of a loss (theft, fire, Etc.) or a previously agreed circumstance (death, retirement, etc.).

Credit History

The payment patterns you have shown in the past help the lender predict how you could act in the future.

Accredited

Who receives a loan or a credit opening.

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Credit Bureau

An organization that provides information on the credit behavior of people who have or have had a credit in banks or companies affiliated with that body.

Solidary Debtor

A person who is obliged to pay a debt together with the borrower, even without owning any property acquired by the latter.

Investment Units (UDI)

Account units used to neutralize the impact of inflation on financial and commercial operations. Its value is constant, and its price is adjusted daily according to the National Index of Consumer Prices.

SHF

SHF (Sociedad Hipotecaria Federal) is a financial institution that promotes, through the granting of loans and guarantees, the construction and acquisition of housing of social interest, as well as the securitization of mortgage portfolios generated by financial intermediaries such as multiple banking institutions, insurance companies, SOFOLES and economic development trusts.

FOVI

FOVI is a Public Trust created in 1963 by the Federal Government through the Ministry of Finance and Public Credit at Banco de México, which is administered by Sociedad Hipotecaria Federal, S.N.C. As of February 26, 2002.

Cofinancing

Conjunction of two or more lines of credit granted for the execution of a project.